LAW OF TURKMENISTAN

of November, 12, 1991

About business activity

 

(As revised and amended by the Mejlis of Turkmenistan on 1 October, 1993 – Gazette of Mejlis of Turkmenistan,

1993, No 9-10, p.58)

 

 (As revised and amended by the Laws of Turkmenistan dd. 18.04.2009 No 32-IV; 28.02.2015 No 194-V and 26.03.2016 No 386-V; 04.11.2017 No 636-V)

 

This Law determines the general basis of business activity (entrepreneurship) in Turkmenistan, regulates the rights and responsibility of subjects of business activity, provides its state protection and support, and governs the relations of entrepreneurs with the state bodies.

The law is directed to creation of the conditions for broad manifestation of initiative and enterprise of citizens based on realization of the principle of equality of all forms of ownership, freedoms of the  disposal of property and the choice of fields of activity.

Section I. General provisions

Article 1. Entrepreneurship

The entrepreneurship is the initiative, independent activities of citizens directed to profit or income earning, performed on its own behalf,  at its own risk and under the property responsibility or on behalf and under property responsibility of the legal entity - the company.

The entrepreneur can perform any kinds of activities which are not prohibited by legal acts of Turkmenistan.

Article 2. Legislation on business activity

The relations connected with entrepreneurship irrespective of forms of ownership, type and field of activity, are regulated by this Law and other legal acts of Turkmenistan.

In the relations where one of the parties is a foreign physical person and legal entity, rules of the international treaty are applied if the current legislation of Turkmenistan does not establish other rules.

Article 3. Subjects of entrepreneurship

The entrepreneurship subjects  (Entrepreneurs) can be:

- physical persons and legal entities of Turkmenistan and other states, and also stateless persons.

The status of the entrepreneur is acquired after the state registration according to the procedure, established by the legislation of Turkmenistan.  The implementation of business activity without registration is forbidden.

Article 4. Forms of business activity

Turkmenistan recognizes any forms of entrepreneurship performed within the law and provides their legal guarantees and support.

The business activity can be performed in the following forms:

- without engagement of the  hired labor and formation of legal entity;

- with engagement of the  hired labor and formation of legal entity.

The business activity can be performed by the director of enterprise,  hired under the contract,  if he is granted relevant powers by the owner of property of the company or  authorized by it body (person).

Article 5. Non-admission of restriction of the competition in entrepreneurship

Application by entrepreneurs of the actions, limiting the competition, is not allowed unless otherwise stipulated in the legal acts of Turkmenistan, including:

- the actions hurting reputation of the competitor, the conclusion of collusions on the production restriction, markets sharing, maintenance of exclusively high or low prices;

- assignment of others commodity (corporate) signs, the data allowing to copy products of other producers, and also other actions which are not provided by the law.

The profit got as a result of the restriction of the competition and other actions which are not provided by the law, is subject to collection in accordance with the established procedure.

Section II. Rights of the entrepreneur, guarantee of business activity

Article 6. Rights of the entrepreneur

According to the legislation of Turkmenistan, the entrepreneur has the right to:

- establish any kinds of the companies for implementation of the activities;

- acquire fully or partially property of the companies irrespective of forms of ownership, other property, the property and non-property rights;

- participate with its property in activities of other business entities;

- use by agreement of the parties the property of legal entities and physical persons;

- hire and dismiss workers on terms of the contract and on other terms established by the legislation;

- independently install forms, systems and the amount of compensation and other income types of persons working on hiring;

- independently create the program of economic activity, to choose suppliers and consumers of the products (works, services), to establish on it (them) the prices and rates according to the legislation of Turkmenistan and the signed agreements;

- open accounts in banks, make currency and other transactions;

- use seal, stamp, forms, emblem, the trademark in their activities;

- dispose freely of the profit (income) remaining with it. When implementing business activity on the basis of the contract the procedure for profit distribution is regulated by the contract;

- gain any, unrestricted by size income;

- use the state system of social protection of the population;

- appeal, in accordance with the established procedure, the  actions of the state and other bodies infringing its rights or legitimate interests;

- act as the participant of the foreign economic relations according to the legislation of Turkmenistan.

Article 7. Obligations of the entrepreneur

According to the legislation of Turkmenistan and the signed contracts, the entrepreneur shall:

- perform compensation of persons working on hiring, not below the minimum established by the state;

- perform the national pension insurance of persons working on hiring, according to the procedure, established by the legislation of Turkmenistan;

- to settle accounts  completely with all hired workers irrespective of financial condition of the company;

to implement measures to ensure environmental safety, labor protection, safety, industrial hygiene and sanitation, guided by the current regulations and standards;

respect the rights and legitimate interests of consumers, ensure the proper quality of the goods (works, services) produced;

to obtain licenses for certain types of activities for the implementation of which a license is required on the territory of Turkmenistan;

timely submit the necessary information to the state statistical bodies and the tax authority in accordance with the established procedure;

to declare bankruptcy of the enterprise in case of impossibility of performance of obligations to creditors.

 

Article 8. Responsibility of the entrepreneur

 

The entrepreneur carrying out his activities with the formation of a legal entity is liable under the Law of Turkmenistan "About Enterprises".

An entrepreneur carrying out his activities without forming a legal entity shall be liable for the obligations associated with this activity with all his property, except for the property against  which, in accordance with the legislative acts of Turkmenistan, recovery cannot be made.

An entrepreneur carrying out his activities based on a contract shall be liable to the owner of the property for the obligations of the enterprise he leads under the procedure and on the terms of the contract concluded between them.

 

Article 9. State registration of the entrepreneurial activities

 

The registration of entrepreneurial activities with the formation of a legal entity is carried out in accordance with the procedure established by the Law of Turkmenistan "About Enterprises".

The registration of entrepreneurial activities without the formation of a legal entity is carried out by local executive authorities at the place of business of an entrepreneur in the manner determined by the Cabinet of Ministers of Turkmenistan.

The refusal to state registration of entrepreneurial activity or violation of the procedure and terms of its registration can be appealed in court.

 

Article 10. Registration of a trademark

 

The registration and use of the trademark are made in accordance with the legislation of Turkmenistan.

 

Article 11. Termination of business activities

 

The termination of entrepreneurial activity is carried out by the decision of the owner or court.

The entrepreneurial activity is terminated by the court in the following cases:

carrying out business activities prohibited by the legislation of Turkmenistan, or not having a special permit (license) for such activities;

repeated or flagrant violation of the law;

violation of environmental safety standards;

recognition of the businessman as a bankrupt;

on other grounds stipulated by the legislation of Turkmenistan.

A court that has taken a decision to terminate an entrepreneurial activity in the cases established by this article determines the procedure and terms for the termination of entrepreneurial activity in accordance with the legislation of Turkmenistan.

In the event of the death of an entrepreneur, his rights and obligations to carry out entrepreneurial activities pass to his heirs.

The entrepreneurial activity carried out on the basis of a contract may be terminated upon the expiration of the term of such contract or its termination upon the application of one of the parties in the cases and in the manner provided for in the contract.

 

SECTION III. REGULATION OF RELATIONSHIPS  OF THE

ENTREPRENEURS WITH THE STATE

 

Article 12. State support of entrepreneurship

 

Turkmenistan guarantees observance of the rights and legitimate interests of entrepreneurs, creates conditions for them to compete, provides support and equal opportunities for entrepreneurs to access material, financial, labor, information, natural and other resources.

 

Article 13. Protection of the rights of entrepreneurs

 

Turkmenistan guarantees the inviolability of property and ensures the protection of the property rights of the entrepreneur.

Interference in the activity of entrepreneurs by state or other bodies or their officials is not allowed, except for the reasons established by the legislation of Turkmenistan and within the powers of the said bodies.

Losses caused to an entrepreneur by unreasonable interference of state or other bodies or their officials in the activities of an entrepreneur shall be compensated by these bodies or their officials.

Disputes about damages are  settled  by the court.

 

Article 14. State Regulation of Entrepreneurship

 

Turkmenistan provides freedom of competition between entrepreneurs, protects consumers from manifestations of unfair competition and monopolism in any areas of entrepreneurship.

The government bodies build their relations with entrepreneurs using:

tax and financial and credit policies, including the establishment of interest on government loans, prices and pricing rules, targeted dotations and subsidies, the size of economic sanctions;

state property and reserve systems, licenses, concessions, leasing, social, economic and other norms and standards;

foreign economic and foreign exchange policy;

state orders;

scientific and technical and social state and regional programs.

 

Article 141. Public Regulation of Private Entrepreneurship

 

Public regulation of private entrepreneurship and coordination of private entrepreneurs in Turkmenistan is carried out by the Union of Industrialists and Entrepreneurs of Turkmenistan.

Union of Industrialists and Entrepreneurs of Turkmenistan:

1) carries out the works on:

a) to unite in their ranks the subjects of private entrepreneurship of Turkmenistan in accordance with the legislation of Turkmenistan;

b) attracting potential entrepreneurs from the temporarily unemployed population to entrepreneurial activity, including by teaching the  them the basics of entrepreneurship in accordance with the procedures and programs of training and retraining of personnel, which are coordinated with the authorized government agency for education;

2) promotes public authorities in the implementation of socially significant, as well as socially useful goals and tasks, including by coordinating the implementation of state programs of social and economic development in the part carried out with the participation of members of the Union of Industrialists and Entrepreneurs of Turkmenistan.

In order to improve the activities to stimulate private entrepreneurship,  support the Union of Industrialists and Entrepreneurs of Turkmenistan in its work, carried out to unite the private entrepreneurs,  to improve the effectiveness of their activities, ensure the protection of their rights and legitimate interests, the bodies that perform the state registration, on written request of the Union of Industrialists and Entrepreneurs of Turkmenistan, provide it with information on the state registration of individuals engaged in the business activities without forming a legal entity - individual entrepreneurs and legal entities of private ownership

 

Article  15 Lost the force - The Law of Turkmenistan of April 18, 2009, No. 32-IV.

 

Article 16. Economic disputes

 

An entrepreneur or his authorized bodies or persons may challenge any actions of other economic entities or claims against him and imposed sanctions in accordance with the procedure established by legislative acts of Turkmenistan, except for cases when collection is uncontested.

 

President of                                               Saparmurat

Turkmenistan                                          Turkmenbashy

 

Ashgabat c.

1 October,1993

No  863-XII